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<b><font style="font-family: 'Times New Roman', Times">Note 2.  </font></b>
</td>
<td>
<b><font style="font-family: 'Times New Roman', Times">Basis of
Presentation and Significant Accounting Policies</font></b>
</td>
</tr>
</table>
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<b><i><font style="font-family: 'Times New Roman', Times">Basis
of Presentation</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The accompanying interim condensed consolidated financial
statements have been prepared without audit, in accordance with
the instructions to
<font style="white-space: nowrap">Form 10-Q</font>
and therefore do not include all information and footnotes
required by accounting principles generally accepted in the
United States of America (“GAAP”) for a complete set
of financial statements. These condensed consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the
Company’s Annual Report on
<font style="white-space: nowrap">Form 10-K</font>
for the
year ended December 31, 2009. In the opinion of management,
the unaudited financial information for the interim periods
presented reflects all adjustments necessary for a fair
presentation of the Company’s results for the periods
presented, with such adjustments consisting only of normal
recurring adjustments. GAAP requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and
liabilities and the reported amounts of revenues and expenses.
By their nature, estimates are subject to an inherent degree of
uncertainty. Actual results could differ from management’s
estimates and operating results for interim periods are not
necessarily indicative of operating results for an entire fiscal
year.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The condensed consolidated financial statements include the
operating results and financial position of Leap and its wholly
owned subsidiaries as well as the operating results and
financial position of LCW Wireless and Denali and their wholly
owned subsidiaries. Prior to August 2010, the Company
consolidated its non-controlling interest in LCW Wireless
and its wholly owned subsidiaries in accordance with the
authoritative guidance for the consolidation of variable
interest entities. The Company acquired the remaining interests
in LCW Wireless in August 2010. The Company consolidates its
non-controlling interest in Denali in accordance with the
authoritative guidance for the consolidation of variable
interest entities because Denali is a variable interest entity
and the Company has entered into an agreement with Denali’s
other member which establishes a specified, minimum purchase
price in the event that it offered or elected to sell its
membership interest to the Company. All intercompany accounts
and transactions have been eliminated in the condensed
consolidated financial statements.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Segment
and Geographic Data</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company operates in a single operating segment and a single
reporting unit as a wireless communications carrier that offers
digital wireless services in the United States. As of and for
the three and nine months ended September 30, 2010, all of
the Company’s revenues and long-lived assets related to
operations in the United States.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Revenues</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s business revenues principally arise from the
sale of wireless services, devices (handsets and broadband
modems) and accessories. Wireless services are provided
primarily on a
<font style="white-space: nowrap">month-to-month</font>
basis. In general, the Company’s customers are required to
pay for their service in advance. Because the Company does not
require customers to sign fixed-term contracts or pass a credit
check, its services are available to a broader customer base
than many other wireless providers and, as a result, some of its
customers may be more likely to have service terminated due to
an inability to pay. Consequently, the Company has concluded
that collectability of its revenues is not reasonably assured
until payment has been received. Accordingly, service revenues
are recognized only after services have been rendered and
payment has been received.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In August 2010, the Company introduced new rate plans for all of
its Cricket services, ceased separately charging for certain
fees (such as activation, reactivation and regulatory fees) and
telecommunications taxes and ceased offering a free month of
service to new Cricket Wireless and Cricket Broadband customers
when they purchase a new device and activate service. Prior to
August 2010, when the Company activated service for a new
customer, it typically sold that customer a device bundled with
a period of free service. Under the authoritative guidance for
revenue arrangements with multiple deliverables, the sale of a
device along with service constitutes a multiple element
arrangement. Under this guidance, once a company has determined
the fair value of the elements in the sales transaction, the
total consideration received from the customer must be allocated
among those elements on a relative fair value basis. Applying
the guidance to these transactions results in the Company
recognizing the total consideration received, less amounts
allocated to the wireless service period (generally the
customer’s monthly rate plan), as equipment revenue.
</div>
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<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Amounts allocated to equipment revenues, and related costs from
the sale of devices, are recognized when service is activated by
new customers. Revenues and related costs from the sale of
accessories and upgrades for existing customers are recognized
at the point of sale. The costs of devices and accessories sold
are recorded in cost of equipment. In addition to devices that
the Company sells directly to its customers at Cricket-owned
stores, the Company sells devices to third-party dealers,
including mass-merchant retailers. These dealers then sell the
devices to the ultimate Cricket customer, similar to the sale
made at a Cricket-owned store. Sales of devices to third-party
dealers are recognized as equipment revenues only when service
is activated by customers, since the level of price
reductions and commissions ultimately available to such dealers
is not reliably estimable until the devices are sold by such
dealers to customers. Thus, revenues from devices sold to
third-party dealers are recorded as deferred equipment revenue
and the related costs of the devices are recorded as deferred
charges upon shipment by the Company. The deferred charges are
recognized as equipment costs when the related equipment revenue
is recognized, which occurs when service is activated by the
customer.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Through a third-party provider, the Company’s customers may
elect to participate in an extended-warranty program for devices
they purchase. The Company recognizes revenue on replacement
devices sold to its customers under the program when the
customer purchases the device.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Sales incentives offered to customers and commissions and sales
incentives offered to the Company’s third-party dealers are
recognized as a reduction of revenue when the related service or
equipment revenue is recognized. Customers have limited rights
to return devices and accessories based on time
<font style="white-space: nowrap">and/or</font>
usage, and customer returns of devices and accessories have
historically been insignificant.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Amounts billed by the Company in advance of customers’
wireless service periods are not reflected in accounts
receivable or deferred revenue since collectability of such
amounts is not reasonably assured. Deferred revenue consists
primarily of cash received from customers in advance of their
service period and deferred equipment revenue related to devices
sold to third-party dealers.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
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Universal Service Fund,
<font style="white-space: nowrap">E-911</font> and
other telecommunications-related regulatory fees are assessed by
various federal and state governmental authorities in connection
with the services that the Company provides to its customers.
The Company reports these fees, as well as sales, use and excise
taxes that are billed and collected from its customers, net of
amounts remitted to the governmental authorities, as service
revenues in the condensed consolidated statements of operations.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
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<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Fair
Value of Financial Instruments</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The authoritative guidance for fair value measurements defines
fair value for accounting purposes, establishes a framework for
measuring fair value and provides disclosure requirements
regarding fair value measurements. The guidance defines fair
value as an exit price, which is the price that would be
received upon sale of an asset or paid upon transfer of a
liability in an orderly transaction between market participants
at the measurement date. The degree of judgment utilized in
measuring the fair value of assets and liabilities generally
correlates to the level of pricing observability. Assets and
liabilities with readily available, actively quoted prices or
for which fair value can be measured from actively quoted prices
in active markets generally have more pricing observability and
require less judgment in measuring fair value. Conversely,
assets and liabilities that are rarely traded or not quoted have
less pricing observability and are generally measured at fair
value using valuation models that require more judgment. These
valuation techniques involve some level of management estimation
and judgment, the degree of which is dependent on the price
transparency of the asset, liability or market and the nature of
the asset or liability. The Company has categorized its assets
and liabilities measured at fair value into a three-level
hierarchy in accordance with this guidance. See Note 5 for
a further discussion regarding the Company’s measurement of
assets and liabilities at fair value.
</div>
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</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Property
and Equipment</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Property and equipment are initially recorded at cost. Additions
and improvements are capitalized, while expenditures that do not
enhance the asset or extend its useful life are charged to
operating expenses as incurred. Depreciation is applied using
the straight-line method over the estimated useful lives of the
assets once the assets are placed in service.
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The following table summarizes the depreciable lives for
property and equipment (in years):
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<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Depreciable<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Life</b>
</td>
<td>
 
</td>
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<td> 
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<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Network equipment:
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Switches
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
10
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Switch power equipment
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
15
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Cell site equipment and site improvements
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Towers
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
15
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Antennae
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Computer hardware and software
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3-5
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Furniture, fixtures, retail and office equipment
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
3-7
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s network construction expenditures are
recorded as
<font style="white-space: nowrap">construction-in-progress</font>
until the network or other asset is placed in service, at which
time the asset is transferred to the appropriate property or
equipment category. The Company capitalizes salaries and related
costs of engineering and technical operations employees as
components of
<font style="white-space: nowrap">construction-in-progress</font>
during the construction period to the extent time and expense
are contributed to the construction effort. The Company also
capitalizes certain telecommunications and other related costs
as
<font style="white-space: nowrap">construction-in-progress</font>
during the construction period to the extent they are
incremental and directly related to the network under
construction. In addition, interest is capitalized on the
carrying values of both wireless licenses and equipment during
the construction period and is depreciated over an estimated
useful life of ten years. During the three and nine months ended
September 30, 2010 the Company did not capitalize interest
to property and equipment. During the three and nine months
ended September 30, 2009, the Company capitalized interest
of $1.3 million and $20.5 million, respectively, to
property and equipment.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In accordance with the authoritative guidance for accounting for
costs of computer software developed or obtained for internal
use, certain costs related to the development of internal use
software are capitalized and amortized over the estimated useful
life of the software. During the three and nine months ended
September 30, 2010, the Company capitalized approximately
$36.9 million and $85.6 million, respectively, to
property and equipment, and amortized internal use software
costs of $9.4 million and $23.1 million, respectively.
During the three and nine months ended September 30, 2009,
the Company capitalized internal use software costs of
$23.3 million and $48.5 million, respectively, to
property and equipment, and amortized internal use software
costs of $5.3 million and $15.4 million, respectively.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Property and equipment to be disposed of by sale is not
depreciated and is carried at the lower of carrying value or
fair value less costs to sell. As of September 30, 2010 and
December 31, 2009, there was no property or equipment
classified as assets held for sale.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Wireless
Licenses</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company, LCW Wireless, Denali and STX Wireless operate
networks under Personal Communications Services
(“PCS”)
<font style="white-space: nowrap">and/or</font>
Advanced Wireless Services (“AWS”) wireless licenses
granted by the FCC that are specific to a particular geographic
area on spectrum that has been allocated by the FCC for such
services. Wireless licenses are initially recorded at cost and
are not amortized. Although FCC licenses are issued with a
stated term (ten years in the case of PCS licenses and fifteen
years in the case of AWS licenses), wireless licenses are
considered to be indefinite-lived intangible assets because the
Company expects its subsidiaries and consolidated joint ventures
to provide wireless service using the relevant licenses for the
foreseeable future, PCS and AWS licenses are routinely renewed
for either no or a nominal fee, and management has determined
that no legal, regulatory, contractual, competitive, economic or
other factors currently exist that limit the useful life of the
Company’s or its consolidated joint ventures’ PCS and
AWS licenses. On a quarterly basis, the Company evaluates the
remaining useful life of its indefinite-lived wireless licenses
to determine whether events and circumstances, such as legal,
regulatory, contractual, competitive, economic or other factors,
continue to support an indefinite useful life. If a wireless
license is subsequently determined to have a finite useful life,
the Company would first test the wireless license for impairment
and the wireless license would then be amortized prospectively
over its estimated remaining useful life. In addition, on a
quarterly basis, the Company evaluates the triggering event
criteria outlined in the
authoritative guidance for the impairment or disposal of
long-lived assets to determine whether events or changes in
circumstances indicate that an impairment condition may exist.
In addition to these quarterly evaluations, the Company also
tests its wireless licenses for impairment on an annual basis in
accordance with the authoritative guidance for goodwill and
other intangible assets. As of September 30, 2010 and
December 31, 2009, the carrying value of the Company’s
and its consolidated joint ventures’ wireless licenses was
$1.9 billion. Wireless licenses to be disposed of by sale
are carried at the lower of their carrying value or fair value
less costs to sell. As of September 30, 2010 and
December 31, 2009, wireless licenses with a carrying value
of $4.0 million and $2.4 million were classified as
assets held for sale, respectively, as more fully described in
Note 7.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Portions of the AWS spectrum that the Company and Denali were
awarded in Auction #66 were subject to use by
U.S. federal government
<font style="white-space: nowrap">and/or</font>
incumbent commercial licensees. FCC rules require winning
bidders to avoid interfering with these existing users or to
clear the incumbent users from the spectrum through specified
relocation procedures. In connection with the launch of new
markets over the past two years, the Company and Denali worked
with several incumbent government and commercial licensees to
clear AWS spectrum. The Company’s and Denali’s
spectrum clearing costs have been capitalized to wireless
licenses as incurred. During the three and nine months ended
September 30, 2010, the Company and Denali incurred
approximately $1.1 million and $3.0 million,
respectively, in spectrum clearing costs. During the three and
nine months ended September 30, 2009, the Company and
Denali incurred approximately $2.4 million and
$7.1 million, respectively, in spectrum clearing costs.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Goodwill
and Other Intangible Assets</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Goodwill primarily represents the excess of the Company’s
reorganization value over the fair value of identified tangible
and intangible assets recorded in connection with fresh-start
reporting as of July 31, 2004. In connection with its
annual goodwill impairment test performed during the third
quarter of 2010, the Company determined that the implied value
of its goodwill was zero. As a result, the Company recorded an
impairment charge totaling $430.1 million in the third
quarter of 2010, reducing the carrying amount of goodwill to
zero. See “Impairment of Indefinite-Lived Intangible
Assets” below.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The change in the carrying amount of the Company’s goodwill
for the nine months ended September 30, 2010 is as follows
(in thousands):
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
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<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="14%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
</tr>
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<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>Nine Months Ended<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom">
<b>September 30,<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2010</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Beginning balance, January 1
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
430,101
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Goodwill impairment charge
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(430,101
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Ending balance, September 30
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s intangible assets consist of trademarks and
customer relationships. The Company’s trademarks were
recorded upon adoption of fresh-start reporting and are being
amortized on a straight-line basis over their estimated useful
lives of fourteen years. Customer relationships acquired in
connection with the Company’s acquisition of Hargray
Wireless, LLC (“Hargray Wireless”) in 2008 are
amortized on an accelerated basis over a useful life of up to
four years.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Impairment
of Long-Lived Assets</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company assesses potential impairments to its long-lived
assets, including property and equipment and certain intangible
assets, when there is evidence that events or changes in
circumstances indicate that the carrying value may not be
recoverable. An impairment loss may be required to be recognized
when the undiscounted cash flows expected to be generated by a
long-lived asset (or group of such assets) is less than its
carrying value. Any required impairment loss would be measured
as the amount by which the asset’s carrying value exceeds
its fair value and would be recorded as a reduction in the
carrying value of the related asset and charged to results of
operations.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As a result of the sustained decrease in its market
capitalization, and in conjunction with the annual assessment of
its goodwill, the Company tested its long-lived assets for
potential impairment during the third quarter of 2010. As the
Company’s long-lived assets do not have identifiable cash
flows that are largely independent of other asset
groupings, the Company completed this assessment at the
enterprise level. As required by the authoritative guidance for
impairment testing, the Company compared its total estimated
undiscounted future cash flows to the carrying value of its
long-lived and indefinite-lived assets at September 30,
2010. Under this analysis, the Company’s total estimated
undiscounted future cash flows were determined to have exceeded
the total carrying value of the Company’s long-lived and
indefinite-lived assets. If the Company’s total estimated
undiscounted future cash flows calculated in this analysis were
10% less than those determined, they would continue to exceed
the total carrying value of the Company’s long-lived and
indefinite-lived assets. The Company estimated its future cash
flows based on projections regarding its future operating
performance, including projected customer growth, customer
churn, average monthly revenue per customer and costs per gross
additional customer. If the Company’s actual results were
to materially differ from those projected, this failure could
have a significant adverse effect on the Company’s
estimated undiscounted future cash flows and could ultimately
result in an impairment to its long-lived assets.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In connection with the analysis described above, the Company
evaluated certain network design, site acquisition and
capitalized interest costs relating to the expansion of its
network which had been accumulated in
<font style="white-space: nowrap">construction-in-progress.</font>
In August 2010, the Company entered into a wholesale agreement
with an affiliate of Sprint Nextel to permit the Company to
offer Cricket wireless services outside its current network
footprint using Sprint’s network. The Company believes that
this agreement will allow it to strengthen and expand its
distribution and will provide it greater flexibility with
respect to its network expansion plans. As a result, the Company
has determined to spend an increased portion of its planned
capital expenditures on the deployment of next-generation LTE
technology and to defer its previously planned network expansion
activities. As a result of these developments, the costs
previously accumulated in
<font style="white-space: nowrap">construction-in-progress</font>
were determined to be impaired and the Company recorded an
impairment charge of $46.5 million during the third quarter
of 2010.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Impairment
of Indefinite-Lived Intangible Assets</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company assesses potential impairments to its
indefinite-lived intangible assets, including wireless licenses
and goodwill, on an annual basis or when there is evidence that
events or changes in circumstances indicate that an impairment
condition may exist. The annual impairment test is conducted
during the third quarter of each year.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<i><font style="font-family: 'Times New Roman', Times">Wireless
Licenses</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s wireless licenses in its operating markets
are combined into a single unit of account for purposes of
testing impairment because management believes that utilizing
these wireless licenses as a group represents the highest and
best use of the assets, and the value of the wireless licenses
would not be significantly impacted by a sale of one or a
portion of the wireless licenses, among other factors. The
Company’s non-operating licenses are tested for impairment
on an individual basis because these licenses are not
functioning as part of a group with licenses in the
Company’s operating markets. As of September 30, 2010,
the carrying values of the Company’s operating and
non-operating wireless licenses were $1,772.2 million and
$147.8 million, respectively. An impairment loss is
recognized on the Company’s operating wireless licenses
when the aggregate fair value of the wireless licenses is less
than their aggregate carrying value and is measured as the
amount by which the licenses’ aggregate carrying value
exceeds their aggregate fair value. An impairment loss is
recognized on the Company’s non-operating wireless licenses
when the fair value of a wireless license is less than its
carrying value and is measured as the amount by which the
license’s carrying value exceeds its fair value. Any
required impairment loss is recorded as a reduction in the
carrying value of the relevant wireless license and charged to
results of operations.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The valuation method the Company uses to determine the fair
value of its wireless licenses is the market approach. Under
this method, the Company determines fair value by comparing its
wireless licenses to sales prices of other wireless licenses of
similar size and type that have been recently sold through
government auctions and private transactions. As part of this
market-level analysis, the fair value of each wireless license
is evaluated and adjusted for developments or changes in legal,
regulatory and technical matters, and for demographic and
economic factors, such as population size, composition, growth
rate and density, household and disposable income, and
composition and concentration of the market’s workforce in
industry sectors identified as wireless-centric (e.g., real
estate, transportation, professional services, agribusiness,
finance and insurance).
</div>
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<div style="margin-top: 0pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-top: 6pt; margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As more fully described above, the most significant assumption
used to determine the fair value of the Company’s wireless
licenses is comparable sales transactions. Other assumptions
used in determining fair value include developments or changes
in legal, regulatory and technical matters as well as
demographic and economic factors. Changes in comparable sales
prices would generally result in a corresponding change in fair
value. For example, a 10% decline in comparable sales prices
would generally result in a 10% decline in fair value. However,
a decline in comparable sales would likely require further
adjustment to fair value to capture more recent macro-economic
changes and changes in the demographic and economic
characteristics unique to the Company’s wireless licenses,
such as population size, composition, growth rate and density,
household and disposable income, and the extent of the
wireless-centric workforce in the markets covered by the
Company’s wireless licenses.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As of September 30, 2010, the aggregate fair value and
carrying value of the Company’s individual operating
wireless licenses were $2,518.2 million and
$1,772.2 million, respectively. If the fair value of the
Company’s operating wireless licenses had declined by 10%
in such impairment test, the Company would not have recognized
any impairment loss. As of September 30, 2010, the
aggregate fair value and carrying value of the Company’s
individual non-operating wireless licenses were
$216.5 million and $147.8 million, respectively. If
the fair value of the Company’s non-operating wireless
licenses had declined by 10% as of September 30, 2010, it
would have recognized an impairment loss of approximately
$1.0 million.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As a result of the annual impairment test of wireless licenses,
the Company recorded an impairment charge of $0.8 million
during the three and nine months ended September 30, 2010
and an impairment charge of $0.6 million during the three
and nine months ended September 30, 2009 to reduce the
carrying values of certain non-operating wireless licenses to
their estimated fair values. No impairment charges were recorded
with respect to the Company’s operating wireless licenses
as the aggregate fair values of these licenses exceeded their
aggregate carrying value.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<i><font style="font-family: 'Times New Roman', Times">Goodwill</font></i>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
During the third quarter of each year, the Company assesses its
goodwill for impairment at the reporting unit level by applying
a fair value test. This fair value test involves a two-step
process. The first step is to compare the book value of the
Company’s net assets to its fair value. If the fair value
is determined to be less than book value, a second step is
performed to measure the amount of the impairment, if any.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In connection with this annual impairment test, the Company
bases its determination of fair value primarily upon its average
market capitalization for the month of August, plus a control
premium. Average market capitalization is calculated based upon
the average number of shares of Leap common stock outstanding
during such month and the average closing price of Leap common
stock during such month. The Company considered the month of
August to be an appropriate period over which to measure average
market capitalization in 2010 because trading prices during that
period reflected market reaction to the Company’s most
recently announced financial and operating results, announced
early in the month of August.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In conducting the annual impairment test during the third
quarter of 2010, the Company applied a control premium of 30% to
its average market capitalization. The Company believes that
consideration of a control premium is customary in determining
fair value and is contemplated by the applicable accounting
guidance. The Company believes that its consideration of a
control premium was appropriate because it believes that its
market capitalization does not fully capture the fair value of
its business as a whole or the additional amount an assumed
purchaser would pay to obtain a controlling interest in the
Company. The Company determined the amount of the control
premium as part of its third quarter 2010 testing based upon its
relevant transactional experience, a review of recent comparable
telecommunications transactions and an assessment of market,
economic and other factors. Depending on the circumstances, the
actual amount of any control premium realized in any transaction
involving the Company could be higher or lower than the control
premium the Company applied.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The carrying value of the Company’s goodwill was
$430.1 million as of August 31, 2010. As of
August 31, 2010, the book value of the Company’s net
assets exceeded the Company’s fair value, determined based
upon its average market capitalization during the month of
August 2010 and applying an assumed control premium of 30%. As a
result, the Company performed the second step of the assessment
to measure the amount of any impairment.
</div>
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<div style="margin-top: 0pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-top: 6pt; margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Under step two of the assessment, the Company performed a
hypothetical purchase price allocation as if the Company were
being acquired in a business combination and estimated the fair
value of the Company’s identifiable assets and liabilities.
This determination required the Company to make significant
estimates and assumptions regarding the fair value of both its
recorded and unrecorded assets and liabilities, such as its
customer relationships, wireless licenses and property and
equipment. This step of the assessment indicated that the
implied fair value of the Company’s goodwill was zero, as
the fair value of the Company’s identifiable assets and
liabilities as of August 31, 2010 exceeded the
Company’s fair value. As a result, the Company recorded a
non-cash impairment charge of $430.1 million in the third
quarter of 2010, reducing the carrying amount of its goodwill to
zero.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
As discussed in greater detail in Note 7, on
October 1, 2010, the Company and Pocket contributed
substantially all of their respective wireless spectrum and
operating assets in the South Texas region to STX Wireless, a
newly formed joint venture controlled and managed by Cricket.
The Company is in the process of determining the fair value of
the net assets acquired and intends to include the final
purchase price allocation and other required disclosures in its
Annual Report on
<font style="white-space: nowrap">Form 10-K</font>
for the year ending December 31, 2010, which may result in
a portion of the purchase price being allocated to goodwill on
the Company’s consolidated balance sheet. The closing price
of Leap common stock was $12.35 on September 30, 2010 and
Leap’s market capitalization was below the Company’s
book value on such date. Since September 30, 2010, the closing
price of Leap common stock has ranged from a high of $12.35 per
share to a low of $10.76 per share on October 27, 2010. If
the final purchase price allocation results in the Company
recording goodwill, and if the price of Leap common stock
continues to trade at prices below book value per share, the
Company expects that it will determine, in connection with its
fourth quarter impairment evaluation, that it is required to
recognize a non-cash impairment charge equal to the full amount
of any goodwill recorded as part of this transaction. Any
required impairment to goodwill would be a function of the
impairment test being performed at the enterprise level and
would not relate to the operating results of the acquired
business or the purchase price allocation.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Investments
in Other Entities</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company uses the equity method to account for investments in
common stock of corporations in which it has a voting interest
of between 20% and 50% or in which the Company otherwise has the
ability to exercise significant influence and for investments in
limited liability companies that maintain specific ownership
accounts in which it has more than a minor but not greater than
a 50% ownership interest. Under the equity method, the
investment is originally recorded at cost and is adjusted to
recognize the Company’s share of net earnings or losses of
the investee. The Company’s ownership interest in equity
method investees ranges from approximately 7% to 20% of
outstanding membership units. The carrying value of the
Company’s investments in its equity method investees was
$26.0 million and $21.3 million as of
September 30, 2010 and December 31, 2009,
respectively. During the three months ended September 30,
2010, the Company’s share of losses of its equity method
investees was $0.3 million. During the nine months ended
September 30, 2010, the Company’s share of the income
of its equity method investees (net of its share of their
losses) was $1.1 million. During the three and nine months
ended September 30, 2009, the Company’s share of the
income of its equity method investees was $1.0 million and
$3.0 million, respectively.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company regularly monitors and evaluates the realizable
value of its investments. When assessing an investment for an
<font style="white-space: nowrap">other-than-temporary</font>
decline in value, the Company considers such factors as, among
other things, the performance of the investee in relation to its
business plan, the investee’s revenue and cost trends,
liquidity and cash position, market acceptance of the
investee’s products or services, any significant news that
has been released regarding the investee and the outlook for the
overall industry in which the investee operates. If events and
circumstances indicate that a decline in the value of these
assets has occurred and is other- than-temporary, the Company
records a reduction to the carrying value of its investment and
a corresponding charge to the consolidated statements of
operations.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Concentrations</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company generally relies on one key vendor for billing
services, a limited number of vendors for device logistics, a
limited number of vendors for its voice and data communications
transport services and a limited number of vendors for payment
processing services. Loss or disruption of these services could
materially adversely affect the Company’s business.
</div>
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<div style="margin-left: 0%">
<!-- BEGIN PAGE WIDTH -->
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<div style="margin-top: 0pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-top: 6pt; margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The networks the Company operates do not, by themselves, provide
national coverage and it must pay fees to other carriers who
provide roaming or wholesale services to the Company. The
Company currently relies on roaming agreements with several
carriers for the majority of its voice roaming services and
generally on one key carrier for its data roaming services. The
Company has also entered into a wholesale agreement with an
affiliate of Sprint Nextel to permit the Company to offer
Cricket wireless services outside of its current network
footprint using Sprint’s network. If the Company were
unable to obtain or maintain cost-effective roaming or wholesale
services for its customers in geographically desirable service
areas, the Company’s competitive position, business,
financial condition and results of operations could be
materially adversely affected.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Share-based
Compensation</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company accounts for share-based awards exchanged for
employee services in accordance with the authoritative guidance
for share-based payments. Under the guidance, share-based
compensation expense is measured at the grant date, based on the
estimated fair value of the award, and is recognized as expense,
net of estimated forfeitures, over the employee’s requisite
service period.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Total share-based compensation expense related to all of the
Company’s share-based awards for the three and nine months
ended September 30, 2010 and 2009 was allocated in the
condensed consolidated statements of operations as follows (in
thousands, except per share data):
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="62%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="4%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="5%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
<b>Three Months<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
<b>Nine Months<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Ended September 30,</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Ended September 30,</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2010</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2010</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2009</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Cost of service
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
852
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
865
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,315
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
2,510
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Selling and marketing expense
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,577
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
1,866
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,514
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
4,915
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
General and administrative expense
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,553
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,276
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
20,034
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
25,644
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Share-based compensation expense
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
8,982
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
11,007
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
26,863
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
33,069
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 10pt">
Share-based compensation expense per share:
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Basic
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.12
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.15
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.35
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.46
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 20pt">
Diluted
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.12
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.15
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.35
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
0.46
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Income
Taxes</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The computation of the Company’s annual effective tax rate
includes a forecast of the Company’s estimated
“ordinary” income (loss), which is its annual income
(loss) from continuing operations before tax, excluding unusual
or infrequently occurring (discrete) items. Significant
management judgment is required in projecting the Company’s
ordinary income (loss). The Company’s projected ordinary
income tax expense for the full year 2010 consists primarily of
the deferred tax effect of the Company’s investments in
joint ventures that are in a deferred tax liability position and
the amortization of wireless licenses for income tax purposes.
Because the Company’s projected 2010 ordinary income tax
expense is a relatively fixed amount, a small change in the
ordinary income (loss) projection can produce a significant
variance in the effective tax rate, therefore making it
difficult to determine a reliable estimate of the annual
effective tax rate. As a result and in accordance with the
authoritative guidance for accounting for income taxes in
interim periods, the Company has computed its provision for
income taxes for the three and nine months ended
September 30, 2010 and 2009 by applying the actual
effective tax rate to the
<font style="white-space: nowrap">year-to-date</font>
income.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
During the three months ended September 30, 2010, the
Company recorded nonrecurring income tax benefits of
$15.5 million and $4.1 million associated with the
deferred tax effect of the goodwill impairment charge and the
purchase of the remaining interest in LCW Wireless, respectively.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company calculates income taxes in each of the jurisdictions
in which it operates. This process involves calculating the
current tax expense and any deferred income tax expense
resulting from temporary differences arising from differing
treatments of items for tax and accounting purposes. These
temporary differences result in deferred tax assets and
liabilities. Deferred tax assets are also established for the
expected future tax benefits to be derived from net operating
loss (“NOL”) carryforwards, capital loss carryforwards
and income tax credits.
</div>
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<div style="margin-top: 0pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-top: 6pt; margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company must then periodically assess the likelihood that
its deferred tax assets will be recovered from future taxable
income, which assessment requires significant judgment. Included
in the Company’s deferred tax assets as of
September 30, 2010 were federal NOL carryforwards of
approximately $2.0 billion (which begin to expire in
2022) and state NOL carryforwards of approximately
$2.1 billion ($21.9 million of which will expire at
the end of 2010), which could be used to offset future ordinary
taxable income and reduce the amount of cash required to settle
future tax liabilities. While these NOL carryforwards have a
potential value of approximately $765.3 million in cash tax
savings, there is no assurance that the Company will be able to
realize such tax savings.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
If the Company were to experience an “ownership
change,” as defined in Section 382 of the Internal
Revenue Code and similar state provisions, its ability to
utilize these NOLs to offset future taxable income would be
significantly limited. The occurrence of such a change would
generally limit the amount of NOL carryforwards that the Company
could utilize in a given year to the aggregate fair market value
of the Company’s common stock immediately prior to the
ownership change, multiplied by the long-term tax-exempt
interest rate in effect for the month of the ownership change.
In general terms, a change in ownership can occur whenever there
is a collective shift in the ownership of a company by more than
50 percentage points by one or more “5%
stockholders” within a three-year period. The determination
of whether an ownership change has occurred for purposes of
Section 382 is complex and requires significant judgment.
The occurrence of such an ownership change would accelerate cash
tax payments the Company would have to make and likely result in
a substantial portion of its NOLs expiring before the Company
could fully utilize them. As a result, any restriction on the
Company’s ability to utilize these NOL carryforwards could
have a material adverse impact on its business, financial
condition and future cash flows.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Recent trading in Leap common stock has increased the risk of an
ownership change under Section 382 of the Internal Revenue
Code. On September 13, 2010, the Company’s board of
directors adopted a Tax Benefit Preservation Plan to help deter
acquisitions of Leap common stock that could result in an
ownership change under Section 382 and thus help preserve
the Company’s ability to use its NOL carryforwards. The Tax
Benefit Preservation Plan is designed to deter acquisitions of
Leap common stock that would result in a stockholder owning
4.99% or more of Leap common stock (as calculated under
Section 382), or any existing holder of 4.99% or more
of Leap common stock acquiring additional shares, by
substantially diluting the ownership interest of any such
stockholder unless the stockholder obtains an exemption from the
Company’s board of directors.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
None of the Company’s NOL carryforwards are being
considered as an uncertain tax position or disclosed as an
unrecognized tax benefit. Any carryforwards that expire prior to
utilization as a result of a Section 382 limitation will be
removed from deferred tax assets with a corresponding reduction
to valuation allowance. Since the Company currently maintains a
full valuation allowance against its federal and state NOL
carryforwards, it is not expected that any possible limitation
would have a current impact on its net income.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
To the extent the Company believes it is more likely than not
that its deferred tax assets will not be recovered, it must
establish a valuation allowance. As part of this periodic
assessment for the three and nine months ended
September 30, 2010, the Company weighed the positive and
negative factors with respect to this determination and, at this
time, does not believe there is sufficient positive evidence and
sustained operating earnings to support a conclusion that it is
more likely than not that all or a portion of its deferred tax
assets will be realized, except with respect to the realization
of a $2.0 million Texas Margins Tax (“TMT”)
credit. The Company will continue to closely monitor the
positive and negative factors to assess whether it is required
to continue to maintain a valuation allowance. At such time as
the Company determines that it is more likely than not that all
or a portion of the deferred tax assets are realizable, the
valuation allowance will be reduced or released in its entirety,
with the corresponding benefit reflected in the Company’s
tax provision. Deferred tax liabilities associated with wireless
licenses and investments in certain joint ventures cannot be
considered a source of taxable income to support the realization
of deferred tax assets because these deferred tax liabilities
will not reverse until some indefinite future period when these
assets are either sold or impaired for book purposes.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
In accordance with the authoritative guidance for business
combinations, any reduction in the valuation allowance,
including the valuation allowance established in fresh-start
reporting, will be accounted for as a reduction of income tax
expense.
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
The Company’s unrecognized income tax benefits and
uncertain tax positions have not been material in any period.
Interest and penalties related to uncertain tax positions are
recognized by the Company as a component of income tax expense;
however, such amounts have not been significant in any period.
All of the Company’s tax years
from 1998 to 2009 remain open to examination by federal and
state taxing authorities. In July 2009, the federal examination
of the Company’s 2005 tax year was concluded and the
results did not have a material impact on the consolidated
financial statements.
</div>
<div style="margin-top: 12pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">
<b><i><font style="font-family: 'Times New Roman', Times">Comprehensive
Loss</font></i></b>
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
Comprehensive loss consisted of the following (in thousands):
</div>
<div style="margin-top: 6pt; font-size: 1pt"> 
</div>
<table border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent; text-align: left">
<!-- Table Width Row BEGIN -->
<tr style="font-size: 1pt" valign="bottom">
<td width="54%"> </td><!-- colindex=01 type=maindata -->
<td width="2%"> </td><!-- colindex=02 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=02 type=lead -->
<td width="7%" align="right"> </td><!-- colindex=02 type=body -->
<td width="1%" align="left"> </td><!-- colindex=02 type=hang1 -->
<td width="3%"> </td><!-- colindex=03 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=03 type=lead -->
<td width="6%" align="right"> </td><!-- colindex=03 type=body -->
<td width="1%" align="left"> </td><!-- colindex=03 type=hang1 -->
<td width="3%"> </td><!-- colindex=04 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=04 type=lead -->
<td width="7%" align="right"> </td><!-- colindex=04 type=body -->
<td width="1%" align="left"> </td><!-- colindex=04 type=hang1 -->
<td width="3%"> </td><!-- colindex=05 type=gutter -->
<td width="1%" align="right"> </td><!-- colindex=05 type=lead -->
<td width="7%" align="right"> </td><!-- colindex=05 type=body -->
<td width="1%" align="left"> </td><!-- colindex=05 type=hang1 -->
</tr>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
<b>Three Months<br />
</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom">
<b>Nine Months<br />
</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Ended September 30,</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="6" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>Ended September 30,</b>
</td>
<td>
 
</td>
</tr>
<tr style="font-size: 8pt" valign="bottom" align="center">
<td nowrap="nowrap" align="center" valign="bottom">
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2010</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2009</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2010</b>
</td>
<td>
 
</td>
<td>
 
</td>
<td colspan="2" nowrap="nowrap" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
<b>2009</b>
</td>
<td>
 
</td>
</tr>
<tr style="line-height: 3pt; font-size: 1pt">
<td> 
</td>
</tr>
<!-- TableOutputBody -->
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -9pt; margin-left: 9pt">
Net loss
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(533,336
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(65,407
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(618,071
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(173,950
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -9pt; margin-left: 9pt">
Other comprehensive loss:
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 19pt">
Net unrealized holding gains (losses) on investments, net of tax
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(6
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(219
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(256
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
389
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom">
<td align="left" valign="bottom">
<div style="text-indent: -10pt; margin-left: 19pt">
Reclassification of (gains) losses included in earnings, net of
tax
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
—
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(1,457
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
<td nowrap="nowrap" align="right" valign="bottom">
6,119
</td>
<td nowrap="nowrap" align="left" valign="bottom">
 
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td style="border-top: 1px solid #000000">
 
</td>
<td>
 
</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td nowrap="nowrap" align="left" valign="bottom">
<div style="text-indent: -9pt; margin-left: 9pt">
Comprehensive loss
</div>
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(533,342
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(65,626
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(619,784
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
<td>
 
</td>
<td nowrap="nowrap" align="left" valign="bottom">
$
</td>
<td nowrap="nowrap" align="right" valign="bottom">
(167,442
</td>
<td nowrap="nowrap" align="left" valign="bottom">
)
</td>
</tr>
<tr valign="bottom" style="font-size: 1pt">
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
<td>
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td style="border-top: 3px double #000000">
 
</td>
<td>
 
</td>
</tr>
</table>
<div align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
</div>
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<!-- Begin Block Tagged Notefalsefalsefalseus-types:textBlockItemTypetextblockThis element may be used to describe all significant accounting policies of the reporting entity.Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 22
-Paragraph 8
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